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- US authorities allege a $2.5B illegal AI server export scheme involving Supermicro executives
- Gemini faces investor lawsuit over abrupt business pivot after IPO
- Both cases triggered sharp market reactions and raised regulatory concerns
US authorities have intensified scrutiny on both the artificial intelligence hardware supply chain and the crypto industry, unveiling separate high-profile cases involving alleged misconduct and investor backlash. The developments surrounding Super Micro Computer, Inc. and Gemini highlight growing regulatory pressure across emerging tech sectors.
DOJ Charges Supermicro Co-Founder in $2.5B AI Server Scheme
The U.S. Department of Justice has charged Supermicro co-founder Yih-Shyan “Wally” Liaw, along with two senior sales executives, over an alleged scheme to illegally export advanced AI servers to China.
Prosecutors claim the group orchestrated the transfer of approximately $2.5 billion worth of servers embedded with restricted graphics processing units (GPUs). These components are critical for artificial intelligence development and are subject to strict US export controls.
Authorities allege the defendants used shell companies, falsified documentation, and staged equipment to bypass compliance checks. According to investigators, over $500 million in sales occurred within just two months in 2025.
While Liaw and one executive have been arrested, another suspect remains at large. Supermicro itself has not been charged and stated the alleged actions violated its internal policies. The company also confirmed cooperation with the ongoing investigation.
Supermicro Stock Drops Following Announcement
Investor reaction was swift. After initially rising during regular trading, Supermicro shares fell sharply in after-hours trading, dropping over 13%. The decline reflects market sensitivity to regulatory risks, especially in sectors tied to national security and advanced technology exports.
The case underscores increasing US efforts to control the flow of AI-related hardware to geopolitical rivals, particularly China.
Gemini Hit With Class-Action Lawsuit After IPO Shift
In a separate development, crypto exchange Gemini is facing a proposed class-action lawsuit from shareholders who allege the company misled investors during its public listing.
The lawsuit targets Gemini co-founders Cameron Winklevoss and Tyler Winklevoss, accusing the firm of pivoting away from its core crypto exchange business shortly after its IPO.
Investors claim Gemini initially positioned itself as a growth-focused exchange expanding globally. However, within months, the company shifted toward a prediction-market-driven model under “Gemini 2.0,” while scaling back international operations and cutting 25% of its workforce.
Also Read: CryptoQuant Warns Ethereum Could Drop to $1,500 Despite Surging Network Activity
Stock Collapse and Investor Losses
Gemini’s stock performance has been volatile. After debuting at $28 and briefly reaching $40, shares have plunged more than 80%, recently trading near $6. Plaintiffs argue the shift in strategy contributed directly to the collapse, leading to significant investor losses.
Despite the controversy, Gemini reported stronger-than-expected quarterly revenue, suggesting underlying business activity remains resilient.
These parallel cases highlight a broader theme: heightened accountability in both AI infrastructure and crypto markets. As regulators tighten oversight and investors demand transparency, companies operating in high-growth tech sectors face increasing pressure to align strategy with compliance and disclosure standards.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
